Lou Simpson

Last Update: 11-14-2016

Number of Stocks: 13
Number of New Stocks: 3

Total Value: $2,512 Mil
Q/Q Turnover: 13%

Countries: USA
Details: Top Buys | Top Sales | Top Holdings  Embed:

Lou Simpson Watch

  • Lou Simpson Goes 2 for 2 in 3rd Quarter

    Lou Simpson (Trades, Portfolio), manager of SQ Advisors LLC, eliminated his positions in Valeant Pharmaceuticals International Inc. (NYSE:VRX) and U.S. Bancorp (NYSE:USB) during the third quarter. With the proceeds from these two transactions, Simpson invested in Axalta Coating Systems Ltd. (NYSE:AXTA) and Sensata Technologies Holding N. V. (NYSE:ST). These transactions align with the guru’s investing strategy of investing in understandable companies.

    Brief investor introduction


  • A High-Tech Manufacturer With Excellent Growth Prospects

    When AMETEK (NYSE:AME) reported its third-quarter results Tuesday, it continued its give-and-take story of this year: gains from recent acquisitions and losses from exposure to the oil and gas industry.

    AMETEK designs and manufactures electronic instruments, electromechanical devices and other products. It specializes in products that demand high precision or accuracy, and these differentiated products help it generate strong margins.


  • 15 Questions With Matthew Peterson

    Matthew Peterson is a managing partner at Peterson Capital Management. We discuss the investors he admires, hidden assets and fundamental analysis.

    1. How and why did you get started investing? What is your background?


  • Valeant: Heads I Win, Tails I Don't Lose Much

    There are several reasons to dislike Valeant Pharmaceuticals (NYSE:VRX). Lack of management credibility, accounting irregularities and other legal investigations related to a price increase on a couple of drugs have caused its share price to fall from the high of $260 to $28.95. Investors in the company, including me, had a stomach-churning experience.

    It's always disheartening to see the value of the investment fall within a space of few months, or even days in this case. The market has a way of humbling even the best of hedge fund managers: Bill Ackman (Trades, Portfolio), Value Act, Sequoia and Lou Simpson (Trades, Portfolio) all have large stakes in Valeant. A few of them had a cost basis in the mid 100's.


  • Lou Simpson Buys Berkshire, Wells Fargo, US Bancorp

    Lou Simpson (Trades, Portfolio) manages a portfolio composed of 12 stocks with a total value of more than $3 billion. During the fourth quarter, he increased his stakes in the following seven stocks.

    The guru increased his stake in Valeant Pharmaceuticals International Inc. (VPX) by 38.18% with an impact of 2.51% on the portfolio.


  • Is Valeant a Good Buy Now?

    Valeant Pharmaceuticals (NYSE:VRX) has been on a wild ride over the past several years. It was once the stock market darling when its stock price jumped from $40 per share in 2012 to $250 per share in July last year. Then it plunged to only $87 at the time of this writing. Investors have been in doubt about the company’s business model and accounting practices. However, value investors such as Lou Simpson (Trades, Portfolio) and T Rowe Price Associates have been buying its shares. Should we follow them into this stock? Let’s dig deeper.

    In October last year, Citron released its bearish research on the company. Citron focused on the company’s relationship with Philidor and R&O Pharmacy. It pointed out that Philidor and R&O Pharmacy were the same company with the same toll-free number to reach the privacy officer. Citron also compared the company with infamous Enron, the company with hot stock and fraudulent accounting in 2001. Before joining Enron in 1990, Jeff Skilling had no experience running a business, having spent 11 years working for McKinsey. Michael Pearson, Valeant's ex-CEO, also worked for McKinsey for 23 years before joining Valeant. Citron thought that when others discovered Philidor, Valeant said the company had purchased an option to acquire Philidor in late 2014. In the report, Citron lowered their target price to $50 per share.


  • In Vast Difference From Berkshire Style, Lou Simpson Adds to Valeant Position

    Former Geico CIO Lou Simpson (Trades, Portfolio) is well known for having been a trusted manager of the Berkshire Hathaway (NYSE:BRK.A) (NYSE:BRK.B) subsidiary, of whom Warren Buffett often sang the praises in his annual shareholder letters. As demonstrated in his fourth-quarter trades, however, Simpson can also have vastly different investment ideas than what can be considered a classic Buffett company.

    One clear example of Simpson’s occasional differences from Buffett and Charlie Munger (Trades, Portfolio)’s style is his current investment in Valeant Pharmaceuticals (NYSE:VRX), whose troubles dominated headlines toward the end of last year. In the fourth quarter, Simpson purchased an additional 745,631 shares in Valeant, upping his stake by 38%. The average price paid for the shares was $112.18, about half the average price he paid during the previous quarter.


  • Lou Simpson Adds to Valeant Stake

    Guru Lou Simpson (Trades, Portfolio) ran the Geico insurance, a subsidiary of Berkshire Hathaway (BRK.A) (BRK.B) for more than three decades with outstanding returns. In his 2004 letters to shareholders, Warren Buffett (Trades, Portfolio) dedicated an entire section to Lou Simpson (Trades, Portfolio) called "Portrait of a Disciplined Investor."



  • Don't Let Mr. Market Separate You From a Great Company

    Over a five-year period, the price of a stock will largely track the fundamentals of the company rather than its quarterly economic reports. We live in a world in which information on virtually anything is no further away than your smartphone.

    With the ability to access information and the media’s reporting on the stock market as though it were a sports event, investors lose track of the long term and focus too much on the short term.


  • Lou Simpsons' High Quality Stocks Include Ametek, Berkshire

    Warren Buffett met Lou Simpson (Trades, Portfolio) in 1996 when he was CEO of Geico's capital operations and Buffett was completing his purchase of Geico. Throughout his time with Berkshire, Simpson and Buffett's stock picks sometimes overlapped due to similarities in their thinking, but both men clearly had independent processes and disagreed with each other sometimes as well.

    The following are the holdings in Simpson's portfolio with the highest GuruFocus business predictability rating.


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